Today’s episode of Cultivating Business Growth is focused on the power of extraordinary customer service. It’s generally accepted in the business world that retaining current customers is a much more efficient way of growing profitability in your business than gaining new ones. The caveat is that they must be the right kind of customers. We will dive into how you can deliver extraordinary service and positively impact sales and customer retention by working to eliminate risk factors from your offerings.
What we cover in this episode:
- 01:54 – The cost of acquiring and keeping customers
- 03:43 – How to create raving fans of your business
- 04:27 – Exceed expectations
- 08:53 – Know your target market
- 11:39 – Know when to say “no”
- 14:50 – Always make things right
- 19:44 – Customer feedback
- 25:24 – Can you guarantee that?
The cost of acquiring and keeping customers
There have been a variety of studies and research over the years that focus on the costs associated with customer retention vs. gaining new customers. When it comes to retention strategy, it is clear that it has a big impact on growth and profitability. Research from Forbes has shown that the cost can cost five times more to attract a new customer than it does to retain an existing customer. Research also noted that increasing customer retention rates by just 5% can increase profits by 25 to 95%.
Beyond the obvious benefits of delivering a service that exceeds expectations, you will see the effects ripple throughout your business. It is the easiest way to make a customer happy, which leads to referrals, repeated business, cross selling and upselling because once you’ve developed that trust with a customer, the rest falls in place.
How to create raving fans of your business
Providing excellent customer service should be a given but, unfortunately, it’s not always the case. Setting proper expectations, following through, and delivering what you promise during the sales process is a big deal for customers. Taking steps to do this intentionally with every transaction builds trust in your company and, ultimately, leads to raving fans.
You must give your clients something to talk about! In order to reach the status of a “raving fan” you really have to go above and beyond to reach an extraordinary level. But how do you do that? No company is perfect, but doing the best you possibly can at giving excellent service, and integrating that mindset into your culture and training across the organization will help you reach that next level.
Stellar communication practices, like answering questions in a timely manner, are really step one in delivering exceptional service. If you don’t have a decent response time or ignore communication best practices, you will struggle to create happy clients, let alone raving fans. People appreciate getting responses quickly, even if you may not have the right answer at the time, or have to let them know you’ll get back to them shortly. That communication is vital, and that communication needs to continue throughout the process in order to build rapport and nurture that trusted relationship with the client.
Know your target market
It’s important to define and understand your target market because it allows you to anticipate their needs and take a more proactive role in the service you provide. This proactive approach and intentional communication style can do wonders for your client experience.
If you do not make the effort to understand the needs and desires of your target market, it can lead you to bring in clients that you won’t serve well, and you set yourself up for failure. Getting the right clients from the start that fit your niche will allow your business to focus and it makes it easier to provide excellent service. Once you’ve found the right market, you have to lay the groundwork before you begin to provide excellent service. You will need to communicate with the client or customer and set the expectations of the services you are going to provide.
Know when to say “no”
Almost every business owner has been in the situation where you just keep taking on the work, and then realize that your service may be declining because you don’t actually have the correct capacity to perform all that work. The customer always seems to suffer in those situations, and in order to provide excellent service, it’s important to shift your focus to giving quality service vs. quantity.
One thing that will allow you and your business to have a smooth onboarding for a client or customer is to ensure you actually have the capacity to take on new clients or customers beforehand. It’s not easy to say no to adding clients or new business, but it really needs to be within the capacity of your team to take on, otherwise your customer service will suffer. You want to be in a position to excel in your customer service and to respond to your clients, and that may mean hiring and training extra staff. Hiring extra staff also means you will need to be sure you are set on the backend of the engagement as well, and that you have the capacity and time to do quality control and be sure that the client is getting what they’ve been promised.
As a business owner, you have to be prepared to say “no” to additional clients or customers if adding them will negatively affect your customer service or company performance. Instilling a culture in your business where making sure the client is happy at all times, and having that core value resonate with your staff will nurture the qualities that your clients will appreciate and rave about.
Alway make things right
Despite how much you plan or prepare, or the quality controls you may have in place, there will be situations that come up where things do not go quite right, and no matter what you do, the client or customer is not going to be happy. It is really important to evaluate the situation and always try to make things right for the customer. In any case, you should always communicate with the client and have that discussion about expectations and how you can make it right for them. Clear and concise communication will allow you to handle those situations, and allow you to make it right, if possible.
If you’ve made a mistake in the evaluation of a client and discover that the time needed to do the job for them will cost more than expected, you have to have that conversation and be upfront and realistic with them. Having that open communication with the client and being honest as to why the cost may be higher than they expected, will allow you to have integrity behind you, and will show you have the customer or clients best interests in mind. Some clients may think that you are trying to upsell, do more more work or change pricing, but if you communicate with them early, and come from a place of trying to service your clients properly and exceed their expectations, you can help them to understand you are trying to give them the service that they need.
Doing everything you can to correct a mistake or misunderstanding is key to making a client happy, especially if the error was on your side. Crediting an amount that was overcharged, offering a free month of service, providing extra time over and above what they normally receive, are just some of the ways to go above and beyond to make things right. And of course, if you find the mistakes or errors on your end, putting the corrections in place so those errors do not happen in the future is paramount. When you do these things, clients will appreciate you and your business and understand when mistakes happen, and know it was unintentional and move forward.
If something does come up, and you have a glitch and an unhappy client, you really want to avoid becoming that “horror” story that it seems everyone has experienced. You don’t want to be the company that people talk about in a negative way, where they spread the word to their friends and say “I’ll never shop there again” or “I’ll never eat there again.” No one is perfect, but being that “horror” story is something you want to avoid at all costs.
How do you measure your performance? Do you know how your customers truly feel about your services? If you are only basing this off of a gut feeling, your customers’ true sentiments may be unknown. Using a tool to measure customer feedback can help you create a tangible number that you can track and improve upon, if needed. Some customers may readily give you feedback directly and let you know exactly how you are doing with praise and kudos, or the opposite if you’ve not met their needs. But many clients need a prompt, like an official survey in order to voice their opinions or concerns. As a business owner, you want to be able to capture the whole picture and grasp where you really stand. Implementing a customer feedback program to track and capture that information will help you have a sense of where you stand, for everyone in your company.
There are many different ways to get customer feedback, and one of those ways we’ve implemented here at PJS & Co CPAs is to create and send out customer surveys. You want to keep the survey brief. Ask one to three questions at most in order to get a sense of what they are thinking, and give them an opportunity to express themselves. A survey can highlight any red flags that may be occurring, and provide a chance to address any issues before they become bigger problems. Jamie stated “If you don’t ask, you’ll never know.” No matter if the feedback is positive or negative, opening that door to more communications and discussions with your customers and clients can help you provide that excellent customer service you are striving for. We use Customer Thermometer to embed the survey within monthly emails and make it very easy to provide feedback on a regular basis.
An owner may have a good sense of how they are doing when they are the only one performing the service, but when their business scales and adds staff, they can lose a little bit of that connection with their clients. An owner should review the results of the feedback and look at it as an opportunity to grow and improve, if needed. Surveys should not be used to point fingers or reprimand your team if the feedback is not positive. Rather this should be used as an opportunity for more training or to improve systems to create the raving fan experience you are aiming to provide.
Can you guarantee that?
Establishing a guarantee for your clients or customers can easily be done if you are selling a product. If you have a product that isn’t functioning, you can replace that product. That’s a fairly straight forward guarantee. But what if you are in the service industry? It does become a bit more complicated to provide a guarantee. If your customer is unhappy with your services, they may not want the service provided a second time. Companies in the service industry can establish a money back guarantee to overcome those challenges.
Building up the client’s trust in you and your service from the beginning of your engagement is what will set you apart from other service providers. Service providers should always be communicating with their clients, especially in the beginning in order to build that trust. If they feel like they are being heard and that you’ve done everything you said you were going to do, that trust continues to build. Jaime stated “If you are really looking for long-term relationships, there’s nothing more important than building trust from day one.”
Building a business is an evolving process, and if your goal is to ultimately continue to build your business, you have to pay attention to providing excellent customer service as you continue to grow. Laying the foundation and putting good processes to take care of clients is the start, but additionally, you should reassess from time to time to be sure that foundation does not develop any cracks or crumbles.
As a business owner, providing excellent customer service is the key to success, but many companies struggle with going above and beyond and setting themselves apart from their competitors. Finding the right customers, exceeding their expectations, and showing you can deliver on your promises and make things right if things do not go as planned are the proven steps to extraordinary customer service. Making the hard decisions upfront to implement the items we discussed today, can really pay off for a business in the long run, and make your business thrive.
Your goal should be to create amazing experiences so that every customer becomes a raving fan. Exceed their expectations in unexpected ways so they have something to talk about when they are asked about your business.